The 7 Shocking Facts discovered in Satyam Scandal

Satyam case one of the biggest corporate scandal happened in India in year 2009.

Satyam computer services was once a leader in IT services in India until pressures to grow more and more overwhelmed the company.

Chairman of Satyam, Ramalinga Raju resigned on 7^th January 2009 and confessed that he had manipulated the accounts by approx. Rs.12,320 crore as per SEBI.

The 7 Shocking Facts discovered in Satyam Scandal

1. Actual number of employees working 40,000 whereas accounts showed 53,000.Mr. Raju had been withdrawing ₨.200 million every month for paying 13,000 nonexistent employees.
2. 7,561 fake bills detected, through these fake invoices company’s revenue got overstated by ₨4,783 crore.
3. Fake debtors up to ₨.500 crore.
4. Bank balances and fixed assets balances were inflated by about ₨1,732 crore and ₨3,308 crore respectively.
5. Fake interest receipts worth ₨.376 crore were also shown in books.
6. Raju has fabricated an estimated 94% of Satyam cash and assets.
7. PWC was the statutory auditor of Satyam. Indian arm of satyam was fined $6million by the SEC (US Securities and Exchange Commission for not following the code of conduct and auditing standards

AFTERMATH

• On 10^th  January,2009 CLB decided to stop the current board of satyam from functioning and appoint 10 nominal directors.
• On the same day, CID team picked up Vadlamani srinivas, satyam then CFO for questioning and he was arrested later
• Stock exchange had halted trading in share of satyam as of 7^th January,2009

Share price	2008	2009
NSE	Rs. 544	Rs. 11.5
New York Stock Exchange	$29.10	$1.8

ON 13^th APRIL, 2009 via a formal public auction process, 46% stake in satyam was purchased by Tech Mahindra.

Actions Still Going On...

RECENTLY,

• SEBI ordered to pay ₨1,849 crore plus interest for making “unlawful gains” while interest will be levied at 12 percent p.a. with effect from January 7, 2009.
• Therefore amount to be given has reached approx ₨3000 crore.
• SEBI order can be challenged before SAT within 45 days of the directions being passed, two of raju’s brother filed appeal in SAT (Securities and Appellate tribunal)

Rahul Madaan

Writer at CA Connect